Equity Release on Machinery You Own

Key highlights

• Release cash from machinery you own outright without selling it
• Useful for working capital, expansion, tax bills or a new opportunity
• The machine's value and condition drive how much you can unlock
• Structured as an asset-backed loan or a sale and leaseback
• Repayments and terms vary widely, so comparing lenders matters

What is equity release on machinery?

Equity release lets you borrow against the value of equipment you already own, converting an idle asset into usable cash while you keep operating the machine. In one common form, a lender advances you funds and takes the machine as security, and you repay over an agreed term. In a sale and leaseback, you sell the machine to a financier and lease it back, receiving the sale proceeds upfront while continuing to use the equipment as normal. Either way, the practical result is the same: capital in your account, drawn from value that was previously locked up in a machine sitting in your yard. It is a way to make your existing assets work harder for the business.

Why would you release equity from equipment?

Businesses release equity for many reasons, most of them about putting capital where it is needed. You might fund working capital during a slow patch, cover a large tax bill, invest in expansion, take on a new contract that needs upfront outlay, or bring on additional equipment or staff. Rather than taking out an unsecured business loan at a higher cost, using machinery you already own as security can access funds on more favourable terms, subject to lender criteria. It suits established operators who have built up owned assets over the years and want to leverage that value without selling the machines they rely on to earn. The cash is flexible; the machine keeps working.

How much can you unlock?

The amount depends chiefly on the machine's current market value, which is driven by its make, model, age, hours and condition, and by demand for that type of equipment. A newer, well-maintained, mainstream machine will support a larger advance than an older, high-hour or specialised unit. Lenders generally advance a proportion of the assessed value rather than the full amount, keeping a buffer as security. If you own several machines, the combined value can support a larger release. Because lenders assess value and set advance levels differently, the amount you can unlock varies across the panel, so comparing is the only reliable way to see the strongest offer for your particular equipment.

Sale and leaseback versus asset-backed loan

The two main structures achieve similar ends by different routes. An asset-backed loan keeps you as the owner; the lender simply takes a security interest over the machine and advances funds you repay over a term. A sale and leaseback transfers ownership to the financier, who pays you the value and leases the machine back to you, so you continue using it while making lease payments. Each has different implications for your balance sheet and tax position, which is why your accountant's input matters here. Both are available across our lender panel, so you can compare how each looks for your situation and choose the one that fits your books and your goals best.

What do lenders assess for equity release?

Lenders weigh both the asset and your business. The machine's value, age, hours, brand and condition determine the security, and they may seek an inspection or valuation. On the business side, they look at time in business, ABN and GST status, credit history and your capacity to service the repayments from trading. Established businesses with owned assets and clean records are well placed, and low-doc options may be available up to around $500,000 subject to lender criteria. Larger releases can require financial statements. Because each lender applies different value assessments and serviceability rules, being matched to the right one materially affects how much you unlock and on what terms, which is where comparing the panel earns its keep.

What does equity release cost?

As with any finance, there is a cost to accessing the funds, reflected in the rate and the repayments over the term. Indicative rates from around 6.55% p.a. give a reference point, though your actual terms depend on your profile, the machine and the structure you choose. Because the loan is secured against a real asset, equity release can often be more cost-effective than unsecured borrowing, but the total cost still depends on how much you draw and over what term. The sensible comparison is not just the rate but whether the funds released will earn or save you more than the finance costs. Simon can lay out the numbers so the decision is clear.

Is equity release right for your business?

Equity release suits established operators who own machinery outright and have a productive use for the capital, whether that is growth, a new contract, or smoothing cash flow. It is less suitable if the funds would simply cover ongoing losses, since you are taking on repayments against an asset you previously owned free. The key questions are what the released cash will achieve and whether the return justifies the finance cost, which your accountant can help you weigh. If the answer stacks up, equity release is a practical way to make owned assets work harder. If it does not, it is better to know that before committing, and comparing helps you decide.

Curious how much cash you could unlock from the machinery you already own? Simon Kendrick can assess your equipment against our panel of 80+ banks and non-bank lenders and give you an obligation-free, indicative quote on equity release. Exploring your options starts with a soft credit check only, so there is no impact on your credit file just for finding out. For eligible applicants, decisions can often be turned around in 24 to 48 hours once we have the details. Reach out today and see how your owned assets could fund your next move, with no obligation to proceed.